New York's relationship with its top trading partner, Canada, could soon get an overhaul as negotiations over the US-Mexico-Canada trade agreement between House Democrats and the Trump administration advance despite the impeachment inquiry.

Business leaders expect that the USMCA – as it's known – will give a boost to New York's more than 4,000 dairy farmers who will gain increased access to Canadian markets. And Capital Region economic developers hope the compact's new auto industry requirements will spur component production around General Motor's three car plants in the state.

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"The free trade agreements have been very beneficial to states along the northern border, just as they have been in certain parts of the South," said Gerald Shaye, former international trade specialist with Empire State Development, New York's economic development agency.

When the influential USMCA may take effect is an open question as negotiations spool into their 10th month, but Democrats have made reaching a deal a priority. House Speaker Nancy Pelosi said this month Democrats were on a "path to yes" and some sources have predicted a vote before Thanksgiving. But fresh pressure from labor unions, as well as the Democrats' impeachment inquiry, are both factors that could compel a handshake – or blow up a deal.

"We'd like to get to yes, but issues have to be resolved," said U.S. Rep. Rosa DeLauro, D-Conn., who is negotiating over the agreement this week on behalf of Democrats. "We're still not there but we're meeting (...) if this were falling apart, we wouldn't continue to meet. That's positive."

The USMCA represents a revision to the North American Free Trade Agreement, which since 1993 has set the rules of play for tariff-free trade between the U.S., Mexico and Canada. NAFTA was a favorite punching bag of President Donald Trump, who has called it "the worst trade deal maybe ever signed anywhere."

Acting on a campaign promise, his administration hammered out a new compact with Canada and Mexico, but Trump needs to win lawmakers’ approval of the accord before it can take effect. For nearly 11 months, a team of nine House Democrats have been negotiating with U.S. Trade Representative Robert Lighthizer to make changes to the agreement before their caucus gives it the okay.

Republicans are frustrated with the pace of negotiations and believe Democrats are unnecessarily delaying. U.S. Rep. Elise Stefanik, R-Schuylerville, has called on Pelosi to immediately put the agreement to a vote, calling it critical for North Country farmers.

U.S. Rep. Antonio Delgado, D-Rhinebeck, agreed that passing the USMCA is "an urgent matter" and said Democratic leadership should pass it quickly.

“The president is correct that we had to address the ongoing effects of the previous agreement that were not favorable to American workers," said Delgado. But he agreed with his party that some provisions of the USMCA are "problematic" and should be changed.

Democrats see a few problems in the USMCA, a document that touches on everything from agriculture to the digital economy to manufacturing to financial services. They want Mexico to be held to higher labor standards, including wages, as they are worried about the outsourcing of American jobs. They want more protections for the environment promised in the agreement. Critically, they want robust mechanisms for enforcing the rules of the agreement.

Democrats also want to eliminate a provision that awards a 10-year market exclusivity period to a drug category called biologics. Democrats see this provision as a give-away to the pharmaceutical industry at a time when they want to beat down health care costs. Biologics already have a 12-year market exclusivity period to protect their expensive research and development, so Gabriella Beaumont-Smith, policy analyst at the Heritage Foundation, said she saw no evidence that a shorter exclusivity period would effect drug costs.

It's unclear what the biologics fight may mean for AMRI Global, an Albany-based contract drug manufacturing organization that produces biologics at its Burlington, Mass. sites. AMRI Global did not respond to a request for comment.

New York's dairy farmers, on the other hand, see a clear win for them in a part of the USMCA that is unlikely to change.

NAFTA did not eliminate all tariffs on agricultural products traded between the three countries. But in a major concession, Canada will allow more American dairy products, like cheese, cream, butter and yogurt, to enter the Canadian markets before Canada applies tariffs.

This could expand American sales in that country for small dairy farmers who ship their products from hubs and large dairy producers, like yogurt-giants Chobani — which has a factory in South Edmeston, N.Y. — and Fage — whose plant is in Johnstown, N.Y. Chobani declined to comment for this story, and Fage did not respond to a request.

The USMCA will also eliminate two milk pricing classes, in effect agreeing to sell skim milk powder, milk protein concentrates and infant formula at or above the same price floor used by the U.S. New York already exports about $40 million in dairy products to Canada annually, according to U.S. Department of Agriculture data.

"Across the board, Canada is allowing about 100,000 metric tons annually of increased dairy products to be exported from the U.S.," said Lauren Williams, senior associate director of national affairs for the New York Farm Bureau. "We're seeing a lot of support for the agreement."

U.S. Sen. Kirsten Gillibrand, D-N.Y., was a "critical" advocate for these dairy changes, U.S. Trade Representative Lighthizer said.

"While I was proud to have secured improvements for our dairy farmers’ access to both the Canadian and Mexican markets in the current version of the USMCA, I’m still very concerned that corporate interests have shaped this agreement," Gillibrand said Friday, citing labor, environmental and pharmaceutical provisions. "Any new trade deal must completely overhaul NAFTA in order to ensure a fair deal for our communities, workers and farmers, but the current draft of the USMCA is inadequate in fixing NAFTA’s problems."

For now, farmers, manufacturers and other businesses who import and export — or have foreign goods in their supply chain — are waiting, many with anxious anticipation. Trucks pass from New York to Canada daily carrying goods between the two countries. Many businesses are wondering how much the final USMCA will reshape this environment.

"There is some nervousness and apprehension because many people think 'Oh no, it's going to be totally changed,'" said Robert Stein, vice president of Regulatory Compliance and Quality Improvement for Mohawk Global Logistics, an international trade logistics and freight company with headquarters in Syracuse and offices in Albany. "I was reading through the text and I was like, 'gosh this reads almost like NAFTA.'"

For Albany-area manufacturers, the USMCA may mean new rules of origin — guidelines governing the rate of tariffs applied to materials, parts and goods based on where they're made — and could force companies to tinker with their supply chain to source more items from North America.

Such rules of origin changes are may have the largest impact on big manufacturers like General Electric, which has steam turbine and generator manufacturing operations in Schenectady, as well as a facility in North Greenbush that produces detector panels for digital x-ray systems. General Electric is responsible for a large portion of New York's exports to Canada and Mexico. New York exported $3.5 billion in goods to Mexico in 2018, the office of the U.S. Trade Representative said.

“We believe that free and fair trade and a rules-based system in North America are good for GE," a GE spokesman said when asked about the USMCA.

One of the biggest changes in the USMCA are new provisions for car makers. The agreement requires 75 percent of auto content be made in North America, and 40 to 45 percent of auto content be made by workers making at least $16 an hour. Business leaders and politicians are hopeful this language will help the U.S. claw back the outsourcing of car manufacturing work to Mexico.

Andrew Kennedy, CEO of the non-profit Center for Economic Growth, has a vision for what this could mean for New York businesses working with General Motor's three plants in Tonawanda, Lockport and Rochester.

"There's an opportunity for this region, especially some of the companies that are in the component businesses," said Kennedy. "It's an opportunity for (...) some of those suppliers to the auto industry to locate operations in New York surrounding those plants as you see in other places, be it South Carolina or Alabama, where there are large scale manufacturing operations for BMW and Mercedes Benz."

The USMCA also represents a modernization of the import-export relationship with Canada and Mexico. It moves paperwork online and streamlines bureaucratic processes for doing trade in North America, something that is often a headache for businesses, a U.S. trade official told the Albany Times-Union.

But despite these changes to the USMCA, many American businesses are left wishing for more, said Stein of Mohawk Global Logistics.

"Many people felt NAFTA really did need some updating. It was getting kind of old and out of date," said Stein. "We really missed a golden opportunity to make [the USMCA] a simpler more user-friendly agreement that would really help both small to medium size companies more effectively utilize it properly."